Russia promises 'administrative help' but no energy subsidies

23rd January 2016, 0 comments

The Russian government will draw up measures to ease administrative costs for energy producers hit by the fall in oil prices, but will not provide financial support, Energy Minister Alexander Novak said on Saturday.

The Kremlin on Friday said it was preparing an anti-crisis plan after oil prices and the ruble-dollar exchange rate briefly hit record lows, dealing a blow to an economy heavily dependent on energy exports.

Asked about possible measures for oil and gas firms, Novak said: "They should not be financial or fiscal, but rather in the order of administrative simplication."

"The government's goal is to facilitate the work of the oil companies," he said. "The oil and gas sector has to increase its productivity, companies have to review their investment plans."

Referring to companies' tax loading, Novak said that "the most important thing right now is to do nothing that could have the impact of an additional charge on the sector."

Authorities have admitted that tumbling oil prices will have to see them slash government spending as they struggle to keep the deficit to under three percent of gross domestic product (GDP).

So far this year, oil prices have faced a rapid descent as concerns snowballed over the strong dollar and weak demand in the faltering world economy -- particularly in Asian powerhouse China. Oil traded at just over $32 a barrel on Friday after hitting a 12-year low under $27 earlier in the week.

Russia's anti-crisis plan, according to business daily RBK, would include measures to support the most fragile sectors of the economy and could cost 420 billion rubles ($5.1 billion).